Moringa Acquisition Corp (NASDAQ:MACA), a special purpose acquisition company (SPAC), has waived a significant financing condition related to its impending merger with Silexion Therapeutics Ltd., an Israeli biotech firm. The announcement came today, following a waiver agreement made on Sunday, June 18, 2024.
The original agreement required Silexion to secure at least $3.5 million in equity financing as a prerequisite for the merger. However, this condition has been waived by Moringa, acknowledging that Silexion has not yet met this requirement.
In return, Silexion has waived the condition that Moringa's sponsor, Moringa Sponsor LP, invest $350,000 in the combined entity, Biomotion Sciences. Despite the waiver, the sponsor will still receive 1,382,325 TopCo ordinary shares upon the merger's completion.
Moreover, the cap on the amount of working capital and other loans from the sponsor to Moringa that can be converted into TopCo ordinary shares post-merger has been raised from $5.2 million to $5.5 million. This adjustment accounts for any fees or expenses payable by Moringa under its business combination marketing agreement with the IPO underwriters' representative, EarlyBirdCapital, Inc.
The agreement also outlines a new compensation arrangement for Ilan Levin, Moringa's Chairman and CEO, who will become a director of TopCo. Levin will receive a monthly fee of $10,000 for 36 months starting from the merger's closing date.
The waiver letter reflects Moringa's commitment to proceed with the merger despite the financing shortfall and indicates a strategic adaptation to the deal's original terms. The merger is part of Moringa's broader strategy to expand into the biotechnology sector.
Investors and interested parties can review the details of the waiver in the Exhibit 10.1 attached to the SEC filing. This move is seen as a critical step towards finalizing the business combination between Moringa and Silexion, aiming to create a publicly-traded entity under the name Biomotion Sciences. The merger is subject to customary closing conditions and regulatory approvals.
This report is based on the latest SEC filing by Moringa Acquisition Corp and provides a summary of the key changes to the merger agreement.
InvestingPro Insights
As Moringa Acquisition Corp (NASDAQ:MACA) strategically maneuvers its merger with Silexion Therapeutics Ltd., investors may be weighing the financial health and future prospects of the combined entity, Biomotion Sciences. According to real-time data, Moringa's market capitalization stands at a modest $48.38 million. This valuation reflects the company's current status in the market, which is important for investors considering the risks and potential of the SPAC post-merger.
An InvestingPro Tip suggests caution, as the company's stock appears to be in overbought territory based on the RSI indicator. This could signal a potential retraction in price, which is crucial for timing investment decisions. Moreover, Moringa's lack of profitability over the last twelve months and weak gross profit margins may be concerning for long-term value investors. On a positive note, Moringa's liquid assets surpass its short-term obligations, indicating a level of financial stability in the near term.
Investors should also note that the company's P/E Ratio is currently negative at -219.3, reflecting its earnings challenges. The company has not provided dividends, which could be a factor for those seeking income from their investments. For those interested in a deeper analysis, there are additional InvestingPro Tips available, which can be accessed through the InvestingPro platform using the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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